Microsoft and Samsung Expand Smartphone Partnership (MSFT)

Microsoft Corporation (NASDAQ: MSFT), on Wednesday, announced the signing of a definitive agreement with Samsung Electronics Co. to cross-license the patent portfolios of both companies.

As per the terms of the agreement between the two companies, Microsoft will be entitled to royalties on Samsung’s mobile phones and tablets running on the Android mobile platform. The two companies also agreed to cooperate in the development and marketing of Windows Phone.

Commenting on the agreement, Andy Lees, President of Windows Phone Division at Microsoft, said that Microsoft and Samsung see the opportunity for dramatic growth in Windows Phone and are investing to make that a reality. Lees said that Microsoft believes in a model where all its partners can grow and profit based on its platform.

The cross-licensing of patent portfolios will enable Samsung and Microsoft to continue to bring the latest innovations to the mobile, said Samsung’s Executive Vice President of Global Product Strategy for the Mobile Communication Division.

The announcement of the expansion of the smartphone partnership has also lifted shares of Microsoft in pre-market trading today. At last check, Microsoft shares were up 1.97% to $26.08 in pre-market trading.

The agreement with Samsung is seventh licensing deal signed by Microsoft in the last three months. The deals have been signed to expand the presence of Windows 7 operating system, which has been lagging behind since its launch. According to data from ComScore, Windows 7 has a market share of just 5.7%, compared with Android and iPhone operating systems’ combined market share of 68.8%.

Al Hilwa, analyst at IDC, said that there is no doubt that Microsoft’s IP strategy is a key ingredient in the Windows Phone play. Hilwa believes that the agreement with Samsung is important as Samsung is the top seller of Android devices.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.